India’s residential real estate sector is closing 2025 with subdued momentum, even as the Union Budget introduced repo rate cuts and income tax rebates to stimulate housing demand. According to early estimates from data analytics firm PropEquity, housing sales across the top nine cities fell to 98,019 units in the fourth quarter (October–December), marking a 16% year-on-year decline and the lowest quarterly volume since Q3 2021.
The downturn was widespread, with only Delhi-NCR and Navi Mumbai reporting positive growth of 4% and 13% respectively. Other major markets, including Pune, Thane, and Mumbai, recorded sharp declines of 31%, 26%, and 25% respectively. Housing supply also contracted, falling 10% year-on-year to 88,427 units, with only Delhi-NCR (29%), Navi Mumbai (15%) and Chennai (9%) seeing increases. The remaining cities experienced supply declines of up to 30%. Industry experts highlight a structural shift in the market. “While overall unit volumes are declining, the aggregate value of launches continues to grow, reflecting a trend towards premiumisation,” said an official from PropEquity. For instance, in 2023, approximately 4.81 lakh units were launched with an aggregate value of Rs 6.3 lakh crore. In contrast, 2024 witnessed fewer launches 4.11 lakh units but a higher total value of Rs 6.8 lakh crore, indicating buyers’ preference for higher-end projects.
Promoters noted that demand in the affordable and mid-income segments remains weak. “Developers are focusing on the elite segment due to limited buyer interest and rising construction costs. Affordable housing launches are not a priority,” an executive from a Delhi-NCR developer said, requesting anonymity. The lag in home loan rate reductions has also affected volumes. Despite cumulative repo rate cuts of 125 basis points in 2025, slow transmission by commercial banks has limited benefits to buyers, further constraining demand in price-sensitive segments. Looking ahead, developers remain cautiously optimistic. Funds raised in 2025 are expected to facilitate new project launches in 2026. Experts suggest that improved bank transmission of repo rate reductions and targeted policy support could help revive demand, particularly in the mid-income segment.
The current trends underscore the need for sustainable and inclusive housing solutions. Analysts suggest integrating energy-efficient construction, climate-responsive designs, and long-term cost savings into residential projects to ensure that even premium and mid-tier developments contribute to equitable urban growth.
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